Oil Set for Weekly Drop on U.S. Supply Before OPEC Meet on Cuts

Oil headed for a third weekly drop this month, weighed down by record U.S. crude supplies while investors await a meeting between OPEC and its allies that may signal whether output curbs will be extended.

Futures rose 0.4 percent in New York, trimming the weekly loss to 1.8 percent. U.S. crude output continued to expand along with inventories last week, data from the government showed on Wednesday. While OPEC won’t formally decide until May whether to prolong a production-cut deal aimed at easing a global glut, officials will meet this weekend in Kuwait to discuss its progress.

Oil this week slid to the lowest since November as rising U.S. inventories and increased drilling activity continued to counter output cuts by the Organization of Petroleum Exporting Countries and other producers. OPEC will extend the deal if stockpiles are still above their five-year average, Saudi Arabian Energy Minister Khalid Al-Falih said in a Bloomberg interview last week.

“We expect prices to stay in that $47 to $50 range in the next few weeks because of that stockpile build,” said Evan Lucas, a market strategist at IG Ltd. in Melbourne. “It’s unlikely that will change unless OPEC comes out and says ‘we stand by the output agreement and we are going to instigate extending it now rather than just talk about pushing it back.”’

West Texas Intermediate for May delivery was up 19 cents at $47.89 a barrel on the New York Mercantile Exchange at 7:55 a.m. in London. Front-month futures closed at $47.34 on Tuesday, the lowest settlement since Nov. 29. Total volume traded was about 49 percent below the 100-day average.

Brent for May settlement added 14 cents, or 0.3 percent, to $50.70 a barrel on the London-based ICE Futures Europe exchange. Prices fell 8 cents to $50.56 on Thursday, the lowest close since Nov. 30. The global benchmark traded at a $2.81 premium to WTI.

U.S. crude production expanded for a fifth week to 9.13 million barrels a day last week, the longest run of gains since January 2016, according to Energy Information Administration data. Nationwide stockpiles increased by 4.95 million to 533.1 million barrels in the week ended March 17. Inventories are at the highest level in weekly EIA data compiled since 1982.

Oil-market news:

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Russia and Saudi Arabia head to this weekend’s OPEC committee meeting as the tortoise and hare of a global deal to cut oil supply, with Moscow sticking to a slow and steady pace despite Riyadh’s cajoling.